General Motors has revised its financial targets for 2024 upwards after exceeding Wall Street’s expectations in its second-quarter results. The Detroit-based automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM increased its forecasts for operating cash flow and earnings per share, while slightly adjusting expectations for net income attributable to shareholders, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, marking a more than 7% increase year-over-year and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, continuing a strong performance that has seen the stock increase by more than 37% this year. Just after the market closed on Monday, GM declared a cash dividend for the third quarter, contributing to the stock’s rise.
In her letter to shareholders, CEO Mary Barra highlighted the company’s successful gas-powered trucks and SUVs while announcing plans to launch eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra also discussed scaling production of the electric Chevrolet Equinox, stating the company’s commitment to disciplined volume growth, despite recent setbacks in the electric vehicle market. She noted that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns, although EV sales did see growth last quarter.
Furthermore, Barra announced a strategic shift for GM’s self-driving unit, Cruise, which will discontinue its Origin vehicle and concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after a previous operational rollback following an incident last October. GM has taken a $600 million charge related to the production halt of the Origin. During a call with analysts, Barra indicated that utilizing the Bolt would ease regulatory concerns about the Origin’s unusual design and help reduce costs.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China, which has been incurring losses; the company recorded a $104 million loss in the second quarter. Earlier this year, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% less than the deliveries from the previous year.